Apr 30 2009
The chargesheet filed by the Central Bureau of Investigation (CBI) is more a confirmation of B Ramalinga Raju’s confession letter than a detailed investigation into the scam. The Satyam founder’s claims have been vindicated. But the agency has failed to uncover any new information relating to the financial misappropriation in the Hyderabad-based software firm. The points which the CBI seems to have missed or chosen to ignore:
Fund diversion
The investigative agency has missed out several points that could have led to unearthing of the alleged fund diversion from Satyam. It has found the disgraced Satyam founder to be honest in his confession about inflating profits and cash balances, but the agency does not throw any light on what happened to the money obtained by the Rajus. This is more remarkable considering that the union minister for corporate affairs, Prem Chand Gupta had said that the Serious Fraud Investigation Office (SFIO) had found preliminary evidence of money diversion from Satyam’s coffers.
Maytas land bank
The CBI has not tracked the source of income with which Raju succeeded in building a 6,000-acre land bank. The aborted December 16 Satyam-Maytas deal had valued Maytas Properties’ land at Rs 6,000 crore. The deal had led to a chain of events that unravelled the biggest corporate fraud in India.
282 missing firms
The chargesheet says Raju had floated 327 front companies in the names of the members of his extended family. Of these, eight companies had raised Rs 1,744-crore loans from non-banking finance companies (NBFCs). If Raju had used eight companies to raise loans and 37 companies to lend to Satyam, what was the reason for floating the additional 282 companies? Strangely, the CBI seems to have ignored to elaborate on this point, merely saying that they were floated for agriculture business.
Interest and tax
Then, there is the issue of foreign depository receipts (FDR) deposit rates not being in sync with the interest received. For example, Satyam received interest of Rs 1.05 crore on fixed deposits of Rs 66 lakh during 2000-01. This works out to be a whopping 158 per cent per annum. Further, the tax deducted at source (TDS) for first quarter (Q1) of 2008 at Rs 169.50 crore against an FDR interest income of Rs 323.84 crore, works out to over 50 per cent, while the next quarter interest TDS is only Rs 30.50 crore on an interest income of Rs 375.45 crore. Obvious discrepancies which have no answers in the chargesheet.
Share sale
In his statement, Ramalinga Raju said neither he nor his family had sold any shares in the last eight years. The CBI contradicts this, saying “over the years, the promoters of the company have sold the shares in the open market and received huge amounts.” The listed details of share sale do not say what was sold and when. The total amount received has been given as Rs 715 crore. Yet in the section on the role of B Rama Raju, brother of Ramalinga Raju, the chargesheet says “out of the said Rs 715 crore in the year 1999-2000, he (Rama Raju) has received Rs 26.68 crore as gift from his family. Is Ramalinga right on this point too?
Ultimately, an apex investigating agency is expected to unravel details meticulously. The charge-sheet in several places is poorly drafted and in others glosses over obvious questions. Perhaps the agency needs to refocus its energies on the biggest scam in the country.
Friday, May 1, 2009
'TechM will be No 1 in other areas with Satyam buyout'
29 Apr 2009, ET Bureau
Excerpts of the interaction of the top management of Tech Mahindra and their employees at the “Tech Mahindra All Hands Meet Conference” last week. TechM is set to be the new owner of Satyam Computer Services.
Sanjay Kalra,President , International Operations Vineet Nayyar, Vice Chairman, MD and CEO
Sanjay Kalra: (President , International Operations)
If you start at the top, while our focus is the telecom ecosystem, only a very small slice of their business is telecom. And they work in all kinds of verticals, be it finance, be it commercial, health care, aerospace, etc. So, this is one big difference from Tech Mahindra that they focused on several verticals, including telecom which clearly is not as significant in size as it is for us.
The second large difference we see is that their service offerings, while our service offerings are focused on IT services, system integration, application development maintenance, and BPO, their areas of ERP and their areas of technology where they clearly are very well advanced. Their BPO is not as enhanced and advanced as ours is. So, what you would say is that if you look at their portfolio, the overlap is rather minimal with us. There will be overlap in the technology areas. So, this is the kind of capabilities they come to bring to the table.
Vineet Nayyar: (Vice Chairman, Managing Director and CEO):
As you can see that there is one of the perceived weaknesses of TechM and almost in every all-hands meet we’ve had, there was always one or two persons asking when are we going to get into other verticals. We have got into other verticals in a very, very big way. We have talked to lot of customers of Satyam. The customers showed incredible loyalty and at least 60% to 70% of the customers which were with Satyam are still with them.
They have 500 active customers at this point and their top clients include British Petroleum, Chevron, you name it, the top, or Citibank. At the moment, their employee strength is around 45,000. It has come down marginally over the last three months. The exact tally at this point is not known but it would be around 40,000 to 42,00 employees, including subsidiary, they have a few subsidiaries and with that it will be a little more.
How was this transaction structured?
We have created a special purpose vehicle and it is this special purpose vehicle which is acquiring the 51% stake in Satyam Computer Services at the rate of Rs.58 per share. To put it, simply, we are paying about 2,900 Crores for this company, out of which 1,800 Crores will come back to the company. So, our total outgo is of the order of about 1,000 Crores for acquiring Satyam.
We have revenue of around $1 billion. Satyam’s revenue was about $1.80 billion but there has been significant client attrition after the scandal. We believe it would be around $1.2 billion going forward. So, together, we would be in a range of about $2.2 billion in a very, very diversified fashion. As always, we will be #1 in telecom. But with the acquisition of Satyam, we will also be #1 in large number of other areas, including business intelligence and enterprise solutions. Obviously, this will de-risk our model and this will give us a strong suite in consulting and enterprise business solutions. Most importantly, it diversifies not only our verticals, but it diversifies our currency.
Lastly, we would clearly be now a Tier-One Company. And with Tier-One Company, our valuation would obviously go up. Does this mean that we are going to merge immediately with Satyam? The answer is no. We will have at least two to three years of parallel run. We will have Satyam with its own identity functioning as it was earlier. Clearly, there will be some management support from Tech Mahindra as it is a Tech Mahindra owned subsidiary. Similarly, TechM will continue on its own trajectory. And two years down the road possibly, or three years down the year possibly, we would integrate both the companies, so that you would have one large TechM.
What are the challenges going ahead?
There are legal cases too which we have to look at, there is restatement of accounts which we have to look at, there is an overhang resulting from the fraudulent activities of the earlier promoter which includes everyone from CBI to FERA violations. We would have to deal with government agencies and provide them with all the information. This does not impact on us or on our own management, but it is without doubt a distraction.
Excerpts of the interaction of the top management of Tech Mahindra and their employees at the “Tech Mahindra All Hands Meet Conference” last week. TechM is set to be the new owner of Satyam Computer Services.
Sanjay Kalra,President , International Operations Vineet Nayyar, Vice Chairman, MD and CEO
Sanjay Kalra: (President , International Operations)
If you start at the top, while our focus is the telecom ecosystem, only a very small slice of their business is telecom. And they work in all kinds of verticals, be it finance, be it commercial, health care, aerospace, etc. So, this is one big difference from Tech Mahindra that they focused on several verticals, including telecom which clearly is not as significant in size as it is for us.
The second large difference we see is that their service offerings, while our service offerings are focused on IT services, system integration, application development maintenance, and BPO, their areas of ERP and their areas of technology where they clearly are very well advanced. Their BPO is not as enhanced and advanced as ours is. So, what you would say is that if you look at their portfolio, the overlap is rather minimal with us. There will be overlap in the technology areas. So, this is the kind of capabilities they come to bring to the table.
Vineet Nayyar: (Vice Chairman, Managing Director and CEO):
As you can see that there is one of the perceived weaknesses of TechM and almost in every all-hands meet we’ve had, there was always one or two persons asking when are we going to get into other verticals. We have got into other verticals in a very, very big way. We have talked to lot of customers of Satyam. The customers showed incredible loyalty and at least 60% to 70% of the customers which were with Satyam are still with them.
They have 500 active customers at this point and their top clients include British Petroleum, Chevron, you name it, the top, or Citibank. At the moment, their employee strength is around 45,000. It has come down marginally over the last three months. The exact tally at this point is not known but it would be around 40,000 to 42,00 employees, including subsidiary, they have a few subsidiaries and with that it will be a little more.
How was this transaction structured?
We have created a special purpose vehicle and it is this special purpose vehicle which is acquiring the 51% stake in Satyam Computer Services at the rate of Rs.58 per share. To put it, simply, we are paying about 2,900 Crores for this company, out of which 1,800 Crores will come back to the company. So, our total outgo is of the order of about 1,000 Crores for acquiring Satyam.
We have revenue of around $1 billion. Satyam’s revenue was about $1.80 billion but there has been significant client attrition after the scandal. We believe it would be around $1.2 billion going forward. So, together, we would be in a range of about $2.2 billion in a very, very diversified fashion. As always, we will be #1 in telecom. But with the acquisition of Satyam, we will also be #1 in large number of other areas, including business intelligence and enterprise solutions. Obviously, this will de-risk our model and this will give us a strong suite in consulting and enterprise business solutions. Most importantly, it diversifies not only our verticals, but it diversifies our currency.
Lastly, we would clearly be now a Tier-One Company. And with Tier-One Company, our valuation would obviously go up. Does this mean that we are going to merge immediately with Satyam? The answer is no. We will have at least two to three years of parallel run. We will have Satyam with its own identity functioning as it was earlier. Clearly, there will be some management support from Tech Mahindra as it is a Tech Mahindra owned subsidiary. Similarly, TechM will continue on its own trajectory. And two years down the road possibly, or three years down the year possibly, we would integrate both the companies, so that you would have one large TechM.
What are the challenges going ahead?
There are legal cases too which we have to look at, there is restatement of accounts which we have to look at, there is an overhang resulting from the fraudulent activities of the earlier promoter which includes everyone from CBI to FERA violations. We would have to deal with government agencies and provide them with all the information. This does not impact on us or on our own management, but it is without doubt a distraction.
Cash reserves help IT biggies stay in shape
2 May 2009 ET Bureau
MUMBAI: It is said what one does in the past matters the most when times are tough. And if this is true, then the country’s top three IT companies —
Tata Consultancy Services, Infosys Technologies and Wipro — have a reason to cheer. Their balance sheets for FY09 show that the IT biggies are sitting on healthy reserves and surplus, which can help them in times of crisis, said experts.
Reserves and surplus account of a company consists mainly of retained net profits over the years, apart from share issue premium. Unlike manufacturing companies where the reserves and surplus prominently reflect fixed manufacturing assets, for IT companies liquid assets such as cash and equivalents, sundry debtors, and loans and advances constitute as much as two-third of the reserves and surplus.
“The reserves and surplus account of an IT company mainly represents liquid assets, since the sector is not capital intensive unlike manufacturing companies. For IT companies, it means huge cash,” said investment advisor SP Tulsian.
The largest IT exporter TCS reported reserves and surplus of Rs 15,502 crore at the end of FY09, up 28% from last year. For Infosys, which trails TCS in revenues, it was up by 33% to Rs 17,968 crore. Wipro, which is third in line, recorded a rise of nearly 20% in its reserves and surplus at Rs 13,630 crore.
“Top IT companies have been running profitable operations, which have shored up the reserves and surplus accounts. This shows the strength of a company and since these are highly liquid in nature, it also reflects their ability to face challenging environment,” said Infosys CFO V Balakrishnan.
However, the large reserves of top Indian IT companies are in sharp contrast with the practices followed by their larger global peers. For instance, IBM and Microsoft have not retained their earnings. These companies distribute their excess profits among stakeholders. Earlier this week, IBM declared buyback of shares amounting to $3 billion. The company has also raised its dividend by 10% - the 14th consecutive year in which it is increasing its dividend.
However, the management of Indian IT companies and accounting professionals whom ET spoke to feel that large reserves help in tough times. “Conservation of cash is essential given the uncertain environment. Cash provides safety and also fuels inorganic growth by facilitating acquisitions,” said Aravind Viswanathan, senior manager (investor relations) at Wipro. The company reduced its dividend from Rs 6 per share in the previous year to Rs 4 per share in FY09, PR Ramesh partner at Deloitte agrees. “It’s a good strategy on the part of companies to preserve cash in uncertain times. That provides for a war chest,” he said.
MUMBAI: It is said what one does in the past matters the most when times are tough. And if this is true, then the country’s top three IT companies —
Tata Consultancy Services, Infosys Technologies and Wipro — have a reason to cheer. Their balance sheets for FY09 show that the IT biggies are sitting on healthy reserves and surplus, which can help them in times of crisis, said experts.
Reserves and surplus account of a company consists mainly of retained net profits over the years, apart from share issue premium. Unlike manufacturing companies where the reserves and surplus prominently reflect fixed manufacturing assets, for IT companies liquid assets such as cash and equivalents, sundry debtors, and loans and advances constitute as much as two-third of the reserves and surplus.
“The reserves and surplus account of an IT company mainly represents liquid assets, since the sector is not capital intensive unlike manufacturing companies. For IT companies, it means huge cash,” said investment advisor SP Tulsian.
The largest IT exporter TCS reported reserves and surplus of Rs 15,502 crore at the end of FY09, up 28% from last year. For Infosys, which trails TCS in revenues, it was up by 33% to Rs 17,968 crore. Wipro, which is third in line, recorded a rise of nearly 20% in its reserves and surplus at Rs 13,630 crore.
“Top IT companies have been running profitable operations, which have shored up the reserves and surplus accounts. This shows the strength of a company and since these are highly liquid in nature, it also reflects their ability to face challenging environment,” said Infosys CFO V Balakrishnan.
However, the large reserves of top Indian IT companies are in sharp contrast with the practices followed by their larger global peers. For instance, IBM and Microsoft have not retained their earnings. These companies distribute their excess profits among stakeholders. Earlier this week, IBM declared buyback of shares amounting to $3 billion. The company has also raised its dividend by 10% - the 14th consecutive year in which it is increasing its dividend.
However, the management of Indian IT companies and accounting professionals whom ET spoke to feel that large reserves help in tough times. “Conservation of cash is essential given the uncertain environment. Cash provides safety and also fuels inorganic growth by facilitating acquisitions,” said Aravind Viswanathan, senior manager (investor relations) at Wipro. The company reduced its dividend from Rs 6 per share in the previous year to Rs 4 per share in FY09, PR Ramesh partner at Deloitte agrees. “It’s a good strategy on the part of companies to preserve cash in uncertain times. That provides for a war chest,” he said.
Satyam's American pie vanishes without trace
30 Apr 2009, ET Bureau
Two-thirds of the $150 million that Satyam Computer Services raised from US investors through issue of American depository shares (ADS) in 2001 is not traceable, the Serious Fraud Investigation Office (SFIO), which probed India’s biggest corporate scam, has found.
The 14,000-page SFIO investigation report to the government has revealed that only $50 million of the ADS collections made it to the company's Indian bank accounts, said an official who has seen the report.
“The investigation has found that Satyam promoters have showed that the money was parked with Citibank, but no such accounts were found with the said bank,” said the official who asked not to be named.
The matter is now being probed by the Enforcement Directorate, he said.
“As of now, there are no clear indications if the money was routed back to India through any other channel, but there is a probability that it may have found its way into Maytas Infra or Maytas Properties,” said the official.
Both the Maytas companies are owned by relatives of Satyam founder and former chairman B Ramalinga Raju, who shocked the world in January by revealing that India’s fourth-largest software exporter had been overstating its profits for years. The money may have also been diverted to other front companies owned by the Raju family, the official added.
With the SFIO investigation bringing out details of a flood of questionable details of the Satyam scandal that leave its total liabilities unclear, the challenge for Tech Mahindra is getting bigger.
The Mahindra group company had outbid L&T Infotech and US billionaire and turnaround specialist Wilbur Ross to strike a deal to buy a 51% stake in Satyam for Rs 2,910 crore.
Tech Mahindra, which announced a 19% jump in its consolidated revenues at Rs 4,465 crore for 2008-09 on Wednesday, has repeatedly said that the company remains upbeat on Satyam.
Last week, Satyam had announced its intention to delist its shares from New York Stock Exchange (NYSE) and the Euronext in Amster-dam due to financial and legal pressures and has started working in that regard.
Last year, Satyam got listed on Euronext in Amsterdam and became the first Indian company to get listed on three major exchanges - NYSE, Nasdaq and Euronext.
Non-US companies must take the ADS route to list their stock on American exchanges such as NYSE and Nasdaq. ADS are the US dollar-denominated equity of foreign companies that can be traded on American stock exchanges.
Two-thirds of the $150 million that Satyam Computer Services raised from US investors through issue of American depository shares (ADS) in 2001 is not traceable, the Serious Fraud Investigation Office (SFIO), which probed India’s biggest corporate scam, has found.
The 14,000-page SFIO investigation report to the government has revealed that only $50 million of the ADS collections made it to the company's Indian bank accounts, said an official who has seen the report.
“The investigation has found that Satyam promoters have showed that the money was parked with Citibank, but no such accounts were found with the said bank,” said the official who asked not to be named.
The matter is now being probed by the Enforcement Directorate, he said.
“As of now, there are no clear indications if the money was routed back to India through any other channel, but there is a probability that it may have found its way into Maytas Infra or Maytas Properties,” said the official.
Both the Maytas companies are owned by relatives of Satyam founder and former chairman B Ramalinga Raju, who shocked the world in January by revealing that India’s fourth-largest software exporter had been overstating its profits for years. The money may have also been diverted to other front companies owned by the Raju family, the official added.
With the SFIO investigation bringing out details of a flood of questionable details of the Satyam scandal that leave its total liabilities unclear, the challenge for Tech Mahindra is getting bigger.
The Mahindra group company had outbid L&T Infotech and US billionaire and turnaround specialist Wilbur Ross to strike a deal to buy a 51% stake in Satyam for Rs 2,910 crore.
Tech Mahindra, which announced a 19% jump in its consolidated revenues at Rs 4,465 crore for 2008-09 on Wednesday, has repeatedly said that the company remains upbeat on Satyam.
Last week, Satyam had announced its intention to delist its shares from New York Stock Exchange (NYSE) and the Euronext in Amster-dam due to financial and legal pressures and has started working in that regard.
Last year, Satyam got listed on Euronext in Amsterdam and became the first Indian company to get listed on three major exchanges - NYSE, Nasdaq and Euronext.
Non-US companies must take the ADS route to list their stock on American exchanges such as NYSE and Nasdaq. ADS are the US dollar-denominated equity of foreign companies that can be traded on American stock exchanges.
Satyam paid excess corporate tax
1 May, 2009
NEW DELHI: The troubled software company Satyam Computer Services Ltd paid excess tax. According to Serious Fraud Investigation Office (SFIO) Saty am paid an additional corporate tax of Rs 186.9 crore on account of inflated accounts.
According to a news article in a business daily, SFIO’s report on Satyam also shows that the company paid an excess incentive of Rs 338 crore to employees. The employees were getting the excess incentive over the last few years on account of inflated books.
The promoters made Rs 3,029.67 crore by selling equity between 2000 and 2009, made possible by price manipulation and insider trading, adds the news article. The SFIO report also suggests connivance by auditors.
NEW DELHI: The troubled software company Satyam Computer Services Ltd paid excess tax. According to Serious Fraud Investigation Office (SFIO) Saty am paid an additional corporate tax of Rs 186.9 crore on account of inflated accounts.
According to a news article in a business daily, SFIO’s report on Satyam also shows that the company paid an excess incentive of Rs 338 crore to employees. The employees were getting the excess incentive over the last few years on account of inflated books.
The promoters made Rs 3,029.67 crore by selling equity between 2000 and 2009, made possible by price manipulation and insider trading, adds the news article. The SFIO report also suggests connivance by auditors.
Raju gets ‘physical’; shows mind for matter
Express News Service 30 Apr 2009
HYDERABAD: In the sweltering heat, a few men were sitting on a bench outside the court hall here at a local court, waiting patiently for their turn to appear before the magistrate.
While one was engaged in an animated discussion on the electoral fortunes of a TRS candidate, another, a bespectacled ‘gentleman,’ was absorbed in Isaac Asimov’s Understanding Physics.
The remaining appeared only too happy to talk to their family members. The man talking politics was once the chief financial officer of Satyam, Vadlamani Srinivas and the TRS candidate in question is his college-mate. As for the science buff, he is none other than B Ramalinga Raju, main accused in the Satyam fraud case.
As the clock inched towards 11.45 a.m., the newly-appointed XIV Additional Chief Metropolitan Magistrate, K Sudhakar, who assumed charge this morning, summoned them and a head count was taken of all the nine men – Ramalinga Raju, B Ramaraju, Vadlamani Srinivas, auditors S Gopalkrishnan, Talluri Srinivas, Satyam’s former vice-president G Ramakrishna, senior manager D Venkatapathy Raju, Ch Srisailam and B Suryanarayana Raju.
‘‘Where were you sir?’’ the magistrate asked Ramalinga Raju and pat came the reply, ‘‘jail’’ from the man who was till then using his criminal brain to comprehend the laws of the universe. ‘‘And, you sir?’’ the magistrate turned to B Suryanarayana Raju, another accused.
‘‘On bail,’’ he replied.
Unlike in the past, this time, the accused were more vocal and without inhibitions, talking freely with their counsels and family members.
Ramalinga Raju was seen talking to his brother Suryanarayana and also taking some points on a note pad.
During his last visit to the court, Ramalinga Raju was found reading H G Wells’ History of the World. It was a sequel to the Outline of History, published in 1920 and perhaps, the first general history constructed on an evolutionary, sociological and anthropological basis.
HYDERABAD: In the sweltering heat, a few men were sitting on a bench outside the court hall here at a local court, waiting patiently for their turn to appear before the magistrate.
While one was engaged in an animated discussion on the electoral fortunes of a TRS candidate, another, a bespectacled ‘gentleman,’ was absorbed in Isaac Asimov’s Understanding Physics.
The remaining appeared only too happy to talk to their family members. The man talking politics was once the chief financial officer of Satyam, Vadlamani Srinivas and the TRS candidate in question is his college-mate. As for the science buff, he is none other than B Ramalinga Raju, main accused in the Satyam fraud case.
As the clock inched towards 11.45 a.m., the newly-appointed XIV Additional Chief Metropolitan Magistrate, K Sudhakar, who assumed charge this morning, summoned them and a head count was taken of all the nine men – Ramalinga Raju, B Ramaraju, Vadlamani Srinivas, auditors S Gopalkrishnan, Talluri Srinivas, Satyam’s former vice-president G Ramakrishna, senior manager D Venkatapathy Raju, Ch Srisailam and B Suryanarayana Raju.
‘‘Where were you sir?’’ the magistrate asked Ramalinga Raju and pat came the reply, ‘‘jail’’ from the man who was till then using his criminal brain to comprehend the laws of the universe. ‘‘And, you sir?’’ the magistrate turned to B Suryanarayana Raju, another accused.
‘‘On bail,’’ he replied.
Unlike in the past, this time, the accused were more vocal and without inhibitions, talking freely with their counsels and family members.
Ramalinga Raju was seen talking to his brother Suryanarayana and also taking some points on a note pad.
During his last visit to the court, Ramalinga Raju was found reading H G Wells’ History of the World. It was a sequel to the Outline of History, published in 1920 and perhaps, the first general history constructed on an evolutionary, sociological and anthropological basis.
Satyam scam hits Raju-promoted social outfit; 350 quit news
30 April 2009
Around 350 employees of Byrraju Foundation, a non-profit organisation founded by the family of ex-promoter of Satyam Computer Services Ramalinga Raju, currently in jail pending completion of fraud investigations, have quit since the Rs7,000 crore rupee scam surfaced in January.
The Foundation now has 850 people on its payroll, down from 1,200 immediately before the scam came to light, Byrraju Foundation chief executive officer Jacob Verghese told a news agency on Wednesday.
The employees left as they were told that only a part of their remuneration would be guaranteed, as the Raju family would not be able to support the foundation because of the legal trouble that they are in, he added.
"The Raju family used to provide Rs10-Rs20 crore out of the annual budget of Rs30 crore of the Foundation. After the family got into legal trouble, we told the employees that only 40-50 per cent of their salaries would be guaranteed. Many of them chose to quit,'' Verghese said.
He, however, claimed many of those who left still work as volunteers on weekends for the initiatives of the Foundation.
On the funding of the foundation, Verghese said the Raju family provided money out of its own pocket and "not a single penny was taken from Satyam''. The same is true for the Rs30-Rs40 crore per annum funding of EMRI, another non-profit body set up by the Rajus, populalry known as the Dial 108 service, that responds to highway emergencies.
Around 350 employees of Byrraju Foundation, a non-profit organisation founded by the family of ex-promoter of Satyam Computer Services Ramalinga Raju, currently in jail pending completion of fraud investigations, have quit since the Rs7,000 crore rupee scam surfaced in January.
The Foundation now has 850 people on its payroll, down from 1,200 immediately before the scam came to light, Byrraju Foundation chief executive officer Jacob Verghese told a news agency on Wednesday.
The employees left as they were told that only a part of their remuneration would be guaranteed, as the Raju family would not be able to support the foundation because of the legal trouble that they are in, he added.
"The Raju family used to provide Rs10-Rs20 crore out of the annual budget of Rs30 crore of the Foundation. After the family got into legal trouble, we told the employees that only 40-50 per cent of their salaries would be guaranteed. Many of them chose to quit,'' Verghese said.
He, however, claimed many of those who left still work as volunteers on weekends for the initiatives of the Foundation.
On the funding of the foundation, Verghese said the Raju family provided money out of its own pocket and "not a single penny was taken from Satyam''. The same is true for the Rs30-Rs40 crore per annum funding of EMRI, another non-profit body set up by the Rajus, populalry known as the Dial 108 service, that responds to highway emergencies.
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